Australia’s military forces are set for an overhaul after the federal government was handed an extensive defence review.

The report, compiled over six months by former Australian Defence Force chief Angus Houston and ex-defence minister Stephen Smith, was handed to Prime Minister Anthony Albanese yesterday.

Houston and Smith examined the location of Australia’s military assets and the type of equipment required by the ADF to meet today’s military threats.

Former Defence Force chief Angus Houston, left, hands the strategic defence review to Prime Minister Anthony Albanese and Defence Minister Richard Marles. (Alex Ellinghausen)

The government response to the document’s findings is expected in the coming weeks.

The review will be used by the government to help overhaul the ADF to counter the build-up of China’s armed forces and its increased assertiveness in the Indo-Pacific.

The Defence Strategic Review will help prepare Australia to effectively respond to the changing regional and global strategic environment and ensure Defence’s capability and structure is fit for purpose and delivers the greatest return on investment,” Albanese said.

The document is expected to urge an expansion of the Australian Defence Force’s long-range strike weapons through increased spending on missiles and drones.

There is speculation that funding for the Army will be cut to pay for increased spending on the navy and air force.

The defence review will help overhaul the Australian Defence Force to meet today’s military threats. (AAP)

Defence Minister Richard Marles said the review was “the single most important re-evaluation of Australia’s strategic posture in the last 35 years”.

Next month the federal government is set to announce the type of nuclear-powered submarine Australia will acquire under the AUKUS defence agreement with the US and Britain.

Countries with the highest military expenditure in the world

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